Treasury reopens two bonds to raise Sh30bn

The government is back in the market seeking to raise Sh30 billion. The Central Bank of Kenya will be reopening two treasury bonds between today and April 18.

The government is going back to raise cash at a time it has been forced on two occasions to rejects bids from investors seeking a higher rate of return at a time there was ample liquidity in the market.

The government plans to use the money raised to offer budgetary support. Both bonds will offer a coupon rate of 10.75 percent per annum. The government’s debt strategy has increasingly come under scrutiny with the country’s debt hitting Sh3.7 trillion as at the end of 2016.

Treasury mandarins however maintain the country’s debt is sustainable. Last month Treasury Principal Secretary Dr Kamau Thugge said the government was Sh30 billion behind on its domestic borrowing program, giving the government room to take on more debt.

“We are quite comfortable where we are in terms of debt and where we are going,” Dr Thugge said during a pre budget forum.

The government plans to lower its borrowing targets from the next financial year and consolidate gains from investment in infrastructure.